WASHINGTON — President-elect Donald Trump, insisting he will not divest himself of his vast business empire as he prepares to assume the presidency, plans instead to turn over all of his business operations to a trust controlled by his two oldest sons and a longtime associate, top officials with his company said Wednesday.
He will donate to the U.S. government all profits from foreign government payments to his hotels, the officials said, describing the arrangements as voluntary measures taken to answer concerns about potential conflicts of interest that would allow Trump to focus on running the country.
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The Trump Organization will also refrain from entering into any new deals with foreign partners, his legal advisers said, backing off from an earlier claim by Trump that his company would have "no new deals" of any kind during his presidency. Instead, the Trump enterprise will have to clear any new transactions with an ethics adviser to be chosen by the president-elect in coming days. That ethics adviser will vet them for potential conflicts, using a standard that his advisers said had not yet been agreed upon.
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The long-promised specifics Trump's advisers provided Wednesday left dozens of unanswered questions about whether or how the incoming president would avoid conflicts as commander in chief.
And they fell short of the recommendations of ethics experts in both parties who have said the only way for Trump to genuinely eliminate potential conflicts is to place all his real estate holdings and other business ventures in a blind trust over which neither he nor his family has any control, severing him entirely from the enterprise. The explanations also raised fresh questions about whether Trump could leave office with his financial holdings more valuable than when he entered the White House.
Top officials with Trump's company detailed the plans on condition of anonymity to avoid pre-empting a news conference the president-elect is holding Wednesday at Trump Tower — his first in nearly six months.
Trump's influence over foreign and domestic policy as president has raised questions about whether U.S. policy could affect his bottom line. For instance, he will oversee the regulation of banks, some of which lend money to his company, and he will have frequent contact with foreign heads of state, including some who run countries where he does business.
Ethics experts expressed severe disappointment with the plan described Wednesday, saying it fell short of what Trump needed to do to push aside the debate over conflicts of interest.
"He is setting up a constitutional crisis on the first day that he takes office," said Norman Eisen, who served as White House ethics adviser during the Obama administration and has been urging Trump to sell his properties or put them in a blind trust. "This is an invitation to scandal and corruption. Foreign money is going to flood through those loopholes."
Trump's legal advisers said in the morning briefing that they had concluded that such a move was simply not possible for reasons they did not fully explain. They made it clear that they thought none of the steps Trump was taking were required by law, arguing — as the president-elect has for months — that federal anti-conflict-of-interest statutes do not apply to him.
And in an unexpected move, they rejected the notion that he could be violating the emoluments clause of the Constitution, which prohibits federal government officials from taking payments or gifts from foreign governments, because of his business interests.
Trump's legal team, in the briefing, argued that it did not believe that this provision, which has rarely been tested in U.S. history, applies to "fair value exchanges," such as a payment on a hotel bill or golf course fee, based on standard rates.
The argument appeared to be an effort by Trump's legal team to avoid, or at least limit, the debate over whether he is violating the constitutional prohibition. But to try to avoid possible controversy, his advisers said Trump would donate all profit from foreign sources — but not all revenue — to the U.S. government at the end of each year. In answer to a question, they said they had not decided whether Trump would make a periodic public accounting of such donations.
Erwin Chemerinsky, the dean of the University of California, Irvine, School of Law, said the plan to turn over "profits" derived from foreign government payments to Trump's hotel was not sufficient to eliminate the constitutional issue.
"As soon as he receives the payment, he will have benefited, even if he later decides to give it away," Chemerinsky said. "This will mean he will have violated a provision of the Constitution."
Trump's legal team announced, but provided no detail on, a plan to name what they described as an "ethics adviser" who would evaluate new deals that the Trump Organization is negotiating within the United States and other aspects of the company's international operations.
His legal team said interviews were underway to select this ethics adviser and to set standards that would be used to evaluate new deals or other business decisions. But the goal, his legal advisers said, is to try to avoid transactions that could create conflicts of interest, which in traditional government terms typically means special terms being offered, or benefits provided, in exchange for special consideration by a government official.
Trump's legal team did not discuss what, if any, possible tax implications might result from the transfer of his assets to an independent trust. They also did not immediately address whether Trump might try to seek a so-called certificate of divestiture from the U.S. government, which is intended to allow private citizens to enter the government without having to pay immediately taxes owed as a result of such moves.
No clarification was immediately provided, as well, as to who the beneficiaries of the trust would be, or if the trust would be irrevocable, meaning that only the beneficiaries could terminate or modify it.
Jared Kushner, Trump's son-in-law, plans to take a role in the White House as senior adviser to the president. On Monday, a lawyer for Kushner, a 36-year-old real estate executive, said he planned to sell some of his assets, whose identity and value are not known, into an irrevocable trust run by his mother. In Kushner's case, his mother and siblings are the beneficiaries, raising questions about just how meaningful divestiture would be.
Trump's aides said they thought the president-elect was not bound by the same ethics disclosures and conflicts-of-interest concerns as Kushner.